# Online Depreciation Rate Finder

Fastest way to find the depreciation rate of an asset in NZ

## About Depreciation Rate Finder

Moneywise Depreciation Rate Finder is an online tool based on the latest depreciation rates for business assets provided by the New Zealand IRD in the General Depreciation Rates IR265 file. It allows users to quickly search for depreciation rates. The results include the estimated useful life of the asset and the depreciation rate calculated using either the diminishing value (DV) or straight line (SL) method. This tool eliminates the need to manually search through PDFs, making the process simple, convenient, and time-saving.

We continuously monitor the latest updates from the IRD to ensure our tool stays up to date with the current depreciation rate calculations.

## How to Use Depreciation Rate Finder

Step 1: Enter the keywords for the business asset you wish to query in the search box. The tool will automatically match all relevant assets.

Step 2: Select the asset you wish to query. The estimated useful life and the depreciation rate, using either the diminishing value (DV) or straight line (SL) method, will be displayed below the search box.

## FAQs About Depreciation

### What is Diminishing Value Depreciation?

Diminishing value depreciation is a method where the depreciation amount decreases over the asset’s useful life. It’s calculated as a percentage of the asset’s remaining book value each year.

### How to Calculate Diminishing Value Depreciation?

**Annual Depreciation Amount = Adjusted Tax Value × Depreciation Rate**

Where:

**Adjusted Tax Value**is the asset’s value at the beginning of the income year, after accounting for any depreciation already claimed.**Depreciation Rate**is the rate set by the IRD for the particular asset.

**Example Calculation:**

Suppose you have an asset with an initial value of $10,000 and a depreciation rate of 20%. After the first year, the adjusted tax value would be:

**Year 1 Depreciation**:

$10,000 × 20% = $2,000

**Adjusted Tax Value for Year 2**:

$10,000 – $2,000 = $8,000

In Year 2, the depreciation would be:

**Year 2 Depreciation**:

$8,000 × 20% = $1,600

This process continues each year, applying the depreciation rate to the adjusted tax value at the start of each year.

This method results in higher depreciation expenses in the earlier years of the asset’s life and lower expenses as the asset ages.

### What is Straight Line Depreciation?

Straight line depreciation evenly distributes the cost of an asset over its estimated useful life. The annual depreciation is calculated as the purchase cost minus the residual value, divided by the estimated useful life.

### How to Calculate Straight Line Depreciation?

**Annual Depreciation Amount = (Cost of the Asset – Residual Value) ÷ Useful Life**

Where:

**Cost of the Asset**is the initial purchase price of the asset.**Residual Value**is the estimated value of the asset at the end of its useful life (if any).**Useful Life**is the number of years the asset is expected to be used.

Example Calculation:

Suppose you have an asset with a purchase cost of $10,000, a residual value of $1,000, and a useful life of 5 years.

**Annual Depreciation**:

($10,000 – $1,000) ÷ 5 = $1,800 per year

So, you would depreciate the asset by $1,800 each year over its useful life of 5 years.

This method results in a consistent depreciation expense each year, which evenly spreads the cost of the asset over its useful life.

### Can I Change the Depreciation Calculation Method Midway?

You may use any method to calculate depreciation, but the same method must be applied consistently each year. Changing methods midway is not allowed.

If you have any questions about our data or would like to suggest new features, please contact us.